What infrastructure lead times impact development and holding costs?

Infrastructure lead times are a critical factor in determining the overall development timeline, capital efficiency, and holding costs for industrial land projects. Delays in essential infrastructure—like roads, power, water, and sewage—can increase interest burden, defer leasing/sales, and impact the investor’s internal rate of return (IRR). Understanding these timelines allows better phasing, financing, and risk management. Below are five key categories of infrastructure with typical lead times and their influence on development and holding costs:

1. Roads and Site Access Infrastructure

• Lead Time: 6–18 months, depending on the scope (internal roads, feeder roads, expressway links).
  
• Sites without all-weather access or with incomplete feeder roads face delayed mobilization, higher transport costs, and limited tenant movement.
  
• Absence of site connectivity often forces developers to fund temporary haul roads, inflating early capital outlay.
  
• Early-stage access is crucial for attracting anchor tenants and construction contractors.

2. Power Supply and Substation Commissioning

• Lead Time: 12–24 months for high-voltage substations (132kV+), especially if new lines or transformers are needed.
  
• Delay in power infrastructure results in:
  
  • Generator dependency (increasing OPEX)
    
  • Inability to commission high-load units (e.g., foundries, auto plants)
    
• Power timelines also affect construction scheduling, especially for concrete plants and equipment yards.
  
• Developers may face holding g interest on idle land while awaiting electrical clearance.

3. Water Supply and Sewer Infrastructure

• Lead Time: 9–18 months for main water lines, sewage networks, and pumping stations.
  
• Delayed water availability forces:
  
  • Private tankers or borewells during construction
    
  • Higher costs for industrial process water or sanitation
    
• Projects may lose environmental clearance momentum without confirmed water and effluent connectivity.
  
• Particularly critical in water-intensive sectors like pharma, food processing, or textiles.

4. Telecom and Digital Utility Provisioning

• Lead Time: 3–9 months for fiber ducting, telecom towers, or data infrastructure.
  
• Although quicker to implement, their absence can delay:
  
  • IT system commissioning
    
  • Automation rollouts
    
  • Regulatory compliance platforms
    
• Essential for modern logistics parks, e-commerce fulfilment centers, and smart factories.
  
• Sites without baseline digital infrastructure face reduced leasing competitiveness.

5. Environmental Infrastructure (CETPs, STPs, Drainage)

• Lead Time: 12–24 months for shared CETPs, STPs, and stormwater systems, especially in multi-tenant parks.
  
• Delay in commissioning such infrastructure restricts:
  
  • Pollution Control Board (PCB) approvals
    
  • Occupancy certificates
    
  • Legal discharges
    
• Developers may incur idle land tax, penalties, or tenant compensation if timelines slip.
  
• Sectors like chemicals, packaging, and agro-processing are especially impacted.